This commentary about Apple, Google, Amazon and other "go-to" stocks from James "Rev Shark" De Porre originally appeared on his RealMoney blog on Dec. 21.
With 2009 rapidly winding down, we are at an interesting juncture as the market is sitting in a six-week-long trading range. Can we break out of that range and see a trend develop?
The bulls are optimistic that positive seasonality and money managers looking to add performance will drive us higher over the 7 1/2 trading days left in the year.
The bears, on the other hand, argue that many folks are ready to lock in gains and move to the sidelines, especially as they come to realize that we still are dealing with severe economic problems.
In a market like this, which is in a very choppy trading range, the best thing to do is focus more on individual stock-picking than overall market direction. Such stock-picking has been difficult, though, because there are no real clear pockets of momentum.
We have had the oil and commodity trade for a while as the dollar trended down, but that reversed in the last week and now the chances look good that the dollar may bounce a bit more.
Other than the dollar trade, the trading themes have been very sparse. A lot of folks were looking for big-cap names, such as
) and the like, to lead as money managers chased them in hopes of some relative outperformance.
So far the group has been a very mixed bag, but those are still likely the "go to" names should we see a Santa Claus rally in the next two weeks. The great thing about trading during the holidays is that we often have a positive mood, and traders will gravitate toward certain sectors and drive them up nicely. I'm still waiting for some better evidence of that occurring.
We have had a little action lately in groups like solar energy, fertilizers, gold, small-cap China and natural gas, but it has not been smooth or persistent. Rangebound markets can provide great opportunities, but you need to find what is hot and focus on those sectors. We'll see what comes to life this week and concentrate on those areas, but it has been a chaotic and uncertain market for a while, and we have to be careful not to force trades just because we are anxious to find some action.
The news wires are fairly slow and will continue to be that way through the end of the year. It has been hard to make much progress lately as this market churns, so the important thing is to just keep at it until the opportunities come.
James "Rev Shark" DePorre is the author of
Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market
. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates
sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback;